Woodie’s in lockdown boom as parent hit by pandemic

GRAFTON Group says its fell by more than six percent last year due to the Spring Covid lockdown, despite a strong performance from its Woodie’s and Chadwicks stores.

Revenue at Woodie’s DIY business in Ireland rose 17pc, thanks to increased sales as people worked from home. At the other end of the scale Grafton reported a 25pc decline in sales in its manufacturing division.

Grafton finished the year strongly with trading in the two months to December 31 “ahead of expectations” as the group saw its average daily like-forlike revenue up by 7.2pc year-on-year and total revenue ahead by 10.8pc to £439.4m (€487.5m).

Demand was strongest in the Woodie’s and Chadwicks businesses in Ireland and in Selco in the UK, according to a trading update from the company.

Grafton benefitted from its strategy of investing in higher returning businesses and from households spending a greater proportion of disposable income on their homes.

Overall, Grafton says its revenue from continuing operations last year declined by 6.1pc to £2.51bn, due to a sharp fall in trading during the second quarter lockdown.

The decline in trading during this period was “significantly offset” by a strong recovery in the second half of the year.

Adjusted operating profit for the year is expected to exceed current consensus of £174m by slightly more than 5pc. Nonetheless, this is lower than the 2019 operating profit due to the “significant impact of Covid-19 in the first half ” of the year.

In Ireland, Chadwicks continued to sustain double digit growth in average daily like-for-like revenue through the second half of the year, which the company said was driven by strong demand in the residential repairs, maintenance and improvements market and growth in house building as transactions recovered.

Overall revenue for 2020 in Ireland is expected to show a 0.2pc decline for the year.

Grafton ended the year with liquidity of around £800m.

Gavin Slark, CEO of Grafton Group, said: “We are very encouraged by the strong recovery and performance of the group in the second half of the year.

“Despite the uncertainties related to the pandemic, we believe Grafton is well placed for continuing progress in the year ahead supported by our very strong financial and market positions.”

Grafton said that while the most recently announced lockdown measures in Ireland had closed most construction activity from January 9, its branches remained open to support essential maintenance and those elements of the industry that are permitted to operate.

Flor O’Donoghue, analyst at Davy, said the business “clearly is in great shape”.

“The stock has responded to a number of positive announcements, rising 37pc in Q4. This has justifiably lifted Grafton’s rating and, while its valuation is not quite as appealing as it was, we believe the stock still screens well in a peer context,” Mr O’Donoghue said.

Last month the company bought Proline Architectural Hardware, a Dublin-based distributor of iron products for doors. Proline reported revenue of €10.8m last year.

Also in December Grafton bought AVC – which trades as StairBox – for £44m (€49m). StairBox is a UK manufacturer and distributor of wooden staircases.

Grafton will announce its final results for the year on February 25.

Revenues at Woodie’s rose 17pc as lockdown triggered a DIY boom